Puerto Rico in line for nearly $5 billion in federal aid for Medicaid

(Reuters) - A $90 billion disaster aid package agreed on by U.S. lawmakers on Wednesday would include nearly $7 billion in aid to storm-battered Puerto Rico and the U.S. Virgin Islands, according to two Senate Democratic aides and Puerto Rico’s governor.

FILE PHOTO: Cars drive under a partially collapsed utility pole, after the island was hit by Hurricane Maria in September, in Naguabo, Puerto Rico October 20, 2017. REUTERS/Alvin Baez/File photo

The deal, likely to be voted on in Congress this week, would send $6.8 billion to the two U.S. territories devastated by Hurricanes Irma and Maria in September, said the aides, who were not authorized to speak with press and requested anonymity.

Puerto Rico Governor Ricardo Rossello issued a statement saying his island would receive about $4.8 billion to shore up its Medicaid program for the poor, which is close to running out of money.

Another $2 billion in Community Development Block Grant (CDBG) funding would pay for repairs to decimated power grids in Puerto Rico and the Virgin Islands, the governor said.

In addition to a slow recovery from Hurricane Maria, its worst natural disaster in 90 years, Puerto Rico is navigating the largest bankruptcy in U.S. government history, with a combined $120 billion in bond and pension debt.

The disaster funds announced on Wednesday would provide just a fraction of the $94.4 billion Rossello has said the island needs to recover from cataclysmic damage to its infrastructure and housing stock. Congress could appropriate more money later.

The governor has asked Congress specifically for $46 billion for CDBG, a program overseen by the U.S. Department of Housing and Urban Development often used to repair housing.

Home damage in Puerto Rico, where the poverty rate is around 46 percent, was exacerbated by the existence of hundreds of thousands of sub-standard “informal” homes, which are typically built by the owners themselves, without permits and often in squatter communities.

It was unclear whether any of Wednesday’s disaster package could be used for home repair.

In his statement, Rossello said he was “grateful that Congressional leaders have finally headed [sic] our demands to provide badly needed emergency relief.”

He added, however, that the approved Medicaid funding would provide only a “period of stability.”